Industrial estates pioneer moves into fund management

GUILLERMO LUCHANGCO, founder and chairman, Investment Capital Corp. of the Philippines

GUILLERMO LUCHANGCO, founder and chairman, Investment Capital Corp. of the Philippines

IT was two years after the 1986 EDSA Revolution, and hopes were high that the Philippine economy would finally be reinvigorated with the infusion of fresh capital from investors. For Guillermo Luchangco, it was finally the right time to open a new business. The former managing director of the leading accounting firm SyCip, Gorres & Velayo (SGV) and vice chairman & president of PSE-listed company Republic Glass, remembered the conditions back then, saying “that was the time when the revolution happened and Marcos was removed, and the economy looked like it was gonna pick up, and I felt it was a good time to start my own company.”

Luchangco is the founder and chair of the Investment Capital Corporation of the Philippines (ICCP Group), a venture capital firm that eventually expanded its services from an investment bank, to a leading developer of light industrial parks in the Philippines.

Luchangco says it took him about a year to finally get the business going, as he was busy doing two things: soliciting funds from people who would be stockholders of the corporation, while the other part was arranging the debt-equity swap for American Express Bank, where they converted their debt into equity in his newly-formed company.

He first put up the ICCP in 1988, which was a boutique investment house. Being an engineer, Luchangco says he has a “developmental type background,” and while ICCP was doing investment banking, they tended a lot towards project origination and project development. One of the things they started with was the Science Park of the Philippines, which is an industrial estate developer.

Luchangco says the reason why they got into that was because “it was difficult for a foreign company to take advantage of the Philippine situation where there was available labor, competitively priced, but they would have trouble with the purchase of the land.”

He explains his idea of an industrial estate as “a place where the foreign company could hit the ground running, doing what they did best, which doesn’t involve cumbersome tasks like dealing with the government, including utilities like water, etc.” So the ICCP took on the task of setting things up, including power and water, and most importantly, the relationship with the LGU (local government unit), the local community, and the people around the site.

Today, the ICCP is the largest private developer of industrial estates in the Philippines, covering approximately 800 hectares of land area. It has a total of six industrial parks, including the first two, which are located in Cabuyao and Calamba, in Laguna; the third in Sto. Tomas, Batangas; and the newest, which they are now beginning to develop, located in Malvar, Batangas.

The ICCP was also the first local investment house accredited by the United States Agency for International Development (USAID) under its Privatization Fund to render privatization advisory services to the Philippine government. Among its many successful transactions through the years, were those of Philippine Airlines, Philippine National Bank, Cebu Pacific, Selecta, Universal Robina Corporation, Filinvest Development Corporation, and DMCI Holdings.

The company also expanded its financial services segment through the set-up of other companies such as the ICCP Venture Partners, Inc. (IVPI), and the Fiducia Asset Management.

IVPI is a venture capital firm which manages five global funds with investments in semiconductors, electronics manufacturing, software, retail, and value-added or outsourced services. The firm was established in 1997, as globalization began opening up trade and markets in Asia. It provides early expansion stage funding to companies in high-growth industries that benefit from IVPI’s ability guide management teams, facilitate funding, and access markets across the two ends of the Pacific.

On the other hand, Fiducia is a Singapore-based exempt fund manager with investment grade, unlevered multi-asset class investment portfolios for European family offices and high net-worth individuals. The other companies within the ICCP Group are the World Trade Center Metro Manila, and the Pueblo de Oro Corp.

These days, Luchangco says he has relinquished a portion of the daily operations to his other partners in the firm, although he still oversees and monitors the projects they are currently undertaking.

”I like to dance, so my wife and I do ballroom dancing, and we like to travel.” His eyes sparkled as he started talking about the places where they have been, beyond the usual tourist spots. He also sees travel as a way of bonding with his family, especially now that they are all grown-up and pursuing their own careers.

When asked why none of his children are working with him, he says it was exactly what he wanted in the first place.

”When I started the firm, I put in a no nepotism clause, to show other people who joined me that ICCP is a professional firm and my son is not gonna be their boss all of a sudden one day.”

More importantly, he says, it taught his kids to be serious in their studies because they have to create their own careers.

In the end, he adds, his endeavors were all worth the effort, not only because he was very successful, but because he is most happy to have contributed to the development and growth of his country. And if only for that, he is truly grateful.


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